In Praise of Superfans

ERA CEO Kim Bayley on the worth of the superfan

Monday 4th June 2018

It may be the most successful video format of all time, but these days the DVD looks a little unloved

Ten years ago in 2008 there were more than 252m DVDs sold in the UK, more than four each for every single man, woman and child. In 2017 that number was down to around 71m – or not much more than one apiece.

So thank heavens then for the DVD Superfan, a rarely praised breed identified thanks to ERA’s quarterly tracking study.

According to ERA’s research, an astonishing 157,000 people – equivalent to the entire population of Chelmsford, Essex – spent £400 or more on DVDs last year.

At an average disc selling price of around £7, that means each of them bought 57 DVDs during the course of the year, more than one a week.

Between them they spent around £63m, accounting for 11% of the entire market.

Set aside the more curious facts raised by this research – like where do they put them all? – and it is clear that despite a decade’s worth of marketing trying to persuade them that digital is the way to go that there is a hard core of video fans who are resolutely wedded to physical formats.

It’s a pattern repeated in Blu-ray where we estimate 247,000 people spent £400 or more on the format. The average price is higher, meaning they got just over 30 discs for their money, but in aggregate they spent a huge £98.8m and accounted for 61% of the entire Blu-ray market.

It amounts to a fascinating sense-check on the industry’s obsession with all things digital and is an indication that if it focuses on digital to the detriment of physical, the video business could lose a significant number of customers.

Take those 157,000 DVD customers for instance and persuade them to invest their hard-earned cash on a standard £7.99 Netflix subscription instead and you’d need nearly 660,000 subscribers, more than the population of Bristol, to generate the same gross revenue.

Even more striking, to equal the £98.8m spent by those 247,000 DVD Superfans you’d need more than one million additional Netflix subscribers.

And unlike the DVD or Blu-ray markets, there is only one retailer of the Netflix service, Netflix itself, and it is in the nature of the Netflix service that it does not have every film from every studio.

To put it another way, a customer who switches wholly from physical video to Netflix amounts to a significant net loss to the industry overall.

None of this should be taken as criticism of Netflix – I’m a subscriber myself – but it’s a principle which applies to all the video services out there from Amazon Prime Video to Rakuten TV to Google Play. The Superfan phenomenon is a reminder that casual talk of consumers “transitioning” from a physical past to a digital future is not without its downsides.

The video ignores its physical Superfans at its peril.

It is fair to say that the video industry now mostly acknowledges the virtues of a mixed physical-digital ecology.

The fact is that not everybody wants to stream or download. The significant number of DVD and Blu-ray Superfans shows that physical formats offer features which digital can never match. Physicality can be a virtue in itself. And no matter how much what the Daily Mail might describe as the “Metropolitan elite” might argue that digital is the modern way, there are hundreds of thousands of consumers who have yet to be convinced.

ERA continues to believe that a multi-channel market which offers consumers multiple ways to consume video is the best way of maximising the value of the market.

Any premature curtailing of format choice for consumers will damage not just retailers, but the overall health of the video industry itself.


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